Frequently Asked Questions
City budgets and tax overrides are complicated! We're compiling answers to common questions about the override. Don't see your question below? Email us at yesformalden@gmail.com.
What is Proposition 2½?
Proposition 2½ is a Massachusetts law passed by voters in 1980 in an attempt to keep property taxes predictable and give communities control over local tax increases. The law sets strict, rigid limits on how much property tax revenue a city or town can collect each year.
Here's how it works:
2.5% annual growth cap: A municipality's property tax revenue can only increase by 2.5% per year, plus revenue from new construction
Levy ceiling: Cities and towns cannot collect more than 2.5% of the total assessed value of all taxable property
What this means: Even if property values soar, expenses drastically increase, or inflation spikes, total property tax collected can still only grow by that 2.5% cap
What is an override?
When a community needs to raise more revenue than Prop 2½ allows, state law gives voters the power to approve an "override" — a permanent increase to the tax levy that becomes part of the base budget going forward.
An override is a vote by the community to increase property taxes above the 2.5% cap set by state law. Unlike temporary funding, an override becomes part of the city’s base budget every year going forward. This allows Malden not only to balance the budget this year, but also to keep pace with rising costs.
Overrides are not unusual. Many surrounding communities have already passed them to protect schools, public safety, and town services. Since 1980, cities and towns across MA have passed a total of about 1,900 overrides (including our neighbors in Medford, Melrose, and Stoneham), and 50% of those communities have passed 5 or more overrides.
An override isn't a workaround or a loophole; it's the mechanism specifically built into the law to allow communities to invest in services that matter to them.
Malden has never passed an override in its history. The March 31st vote represents the first time residents will decide whether to authorize additional funding to address the City's budget gap and prevent cuts to essential services.
Why does Malden need an override?
Like other cities, Malden faces serious financial challenges due to forces beyond our control:
Inflation has gone up more than 25% since 2020, making everything more expensive.
Health insurance costs for City workers and retirees are going up fast. Costs went up 15% last year alone.
School spending requirements from the state are growing faster than City revenue. This means that the City is required to put more and more of its available funds into the schools, and to take that money from everything else - such as police, fire, DPW, and so on. The schools need the investment, but the City's budget - constrained by Prop 2½ - can't keep up.
Property taxes can only grow at 2.5% per year. Only the voters can approve an increase above that amount. And the City's expenses are growing much faster than 2.5%.
Malden needs to pass the override to close a budget gap that is more than $8 million.
What will happen if Malden does not pass an override?
Voting no in this election means that 40-60 City jobs could be cut in order to balance the budget. That means hardworking Malden residents who work for police, fire, the library, and public works will be out of a job. Without these positions and services, our city will be worse off. The loss of these positions will have ripple effects throughout the community. Slower city services makes the city less appealing for new and existing businesses. Insurance premiums for homeowners and renters will rise as the city loses public safety certifications/rankings. These effects could be felt for years to come.
How much will an override cost me?
If the override passes, the average single-family homeowner will see their property tax bill increase by about $29-$44 per month, depending on whether Question 1 ($5.4 million) or Question 2 ($8.2 million) is adopted. The exact impact on your tax bill depends on your property's assessed value.
If you own your own home, the City has increased the residential exemption which may reduce the net impact of a Proposition 2 1/2 override. For the average single-family home, the residential exemption increase will reduce your taxes by $291. Learn more here.
Can’t the city just cut spending instead of raising taxes?
The only way to cut more than $8 million from the City budget is to significantly reduce the City's workforce. The exact amounts are unknown, but we estimate that this gap could require cutting 40-60 jobs, which would have a major impact on City services like police, fire, public works, library, youth and senior services, and City Hall. If we want to keep Malden a great city to live in, we can't compromise on our city services.
Why don't we know what positions would be cut?
After the election, the Mayor and the City Council will negotiate the City budget. This process cannot begin until they know how much funding the City will have - which will be a direct result of the March 31st election. What we do know is that the budget gap will be more than $8 million dollars, and could grow as more information - such as state financial requirements and health care costs - becomes available.
Don’t rising property values mean that the city gets more property tax?
No, the City does not get a windfall from rising property values. By law, and setting aside new growth, each year the City’s total property tax levy can only increase by 2.5%.
The “total property tax levy” is the total amount the city can collect. Even if property values go up by an average of 5% in a year, the “total property tax levy” can still only go up by 2.5%.
In fact, if the total value of all property in the City increases, the tax rate has to decrease so that the total amount of property tax collected increases by only 2.5%. Learn more here.
How can I be sure that the City is spending my taxes responsibly?
The City shows exactly how tax dollars are being spent with a tool called ClearGov. This tool uses actual data from the current year (FY26) budget and previous budgets.
The City is audited every year. Annual audits and budgets are available here.